21st October 2018 / Beth Oleyar: A Changed Landscape on the Horizon

Most brokers can agree on one thing: the Australian mortgage industry will be hit hard by the recommendations of the royal commission.

The sector is bracing itself to become collateral damage for the sins of the bankers as uncertainty mounts. And it's not just brokers who are suffering.

Would-be borrowers are already being hit by blanket bans. We've seen a dramatic decline in mortgage lending by banks, and many Australians are now struggling to obtain credit. Billions have been shed from shareholder value, hitting mum-and-dad investors especially.

Alternative Opportunities

Although credit lines have tightened, customers still need money. If the banks say no, those customers are just going to look elsewhere. This means brokers need to be ready with potential solutions.

This means the overflow customers banks can no longer service are even more likely to turn to alternative finance providers than we have already witnessed over the past few decades in Australia.

Brokers: The Secret Ingredient

Brokers have the community connections to break down the barriers between borrowers and lenders. They know who needs money and can act as go-betweens to connect buyers with the lenders who can help them with credit solutions.

In fact, brokers are by far the best-placed actors in this story to lead Australia into a new, post-commission era of trust, service, and increased value in the broader context of financial services.

And while the impetus for change has stemmed from a system riddled with inefficiencies and malpractices, the process of change is likely to lead to a newly positive world order. It's up to Australian brokers to lead us all there – and the faster we act, the better.